Cutting Costs: Take the Office Out of the Home

13 Comments

Just like any other business, your freelancing practice will do much better overall if you regularly conduct an efficiency review and try to cut costs where possible. I’ll be looking at a number of ways to do so in a series of “Cutting Costs” posts, starting today with one cost-saving measure I’m in the process of working out myself.

My first cost-cutting measure is a big one, because I’m looking to free up a significant amount of cash in one fell swoop, and the timing is convenient. My lease is up in a few short weeks, and so I’m already on the lookout for cheaper accommodation. I live in downtown Toronto, and my place is bigger than one person needs because I wanted to have enough space for a home office. My rent is accordingly quite expensive.

Luckily, working from home doesn’t necessarily mean working from home all of the time, so this time around I’m willing to make concessions regarding space (and location) in the interest of saving significantly in terms of my monthly rent. Instead of a one-bedroom-plus-den, which I have now, I’ll be looking for a one-bedroom place, which in this market might amount to as much as $700 in savings, depending on where I end up relocating.

To make up for the lost space, I plan on spending much more time working away from home. I have a three-part approach to accomplishing this, which should ensure that my routine stays varied enough to remain interesting, and has some built-in redundancy to ensure I always have somewhere to go to work that isn’t my own apartment.

Coworking/External Office Space

The first and primary part of my plan is to use a largish portion of the money I save in rent to pay for a membership at a newly opened coworking venture here in the city. It’s called Camaraderie, and it’s conveniently located relatively close to the area I’m looking to move to. Membership fees are $300 per month, which guarantees you a spot during working hours, including free Wi-Fi and hot beverages.

It’s a deal that can’t be matched by renting office space alone in the downtown area, but if you live somewhere that isn’t a major metropolitan area and that doesn’t have a local coworking space, try looking around for office space rentals, and see if they might not be cheaper than maintaining the larger place you’re using now as your living/work space. You might be surprised at how much money you can save this way. Even the savings represented by being able to choose a lower-cost Internet plan for home and savings on tea and coffee spend are significant.

Museum/Gallery/Library Memberships

The second part of my office/house separation plan involves simply maintaining the library, museum and other public space memberships I already have. Library cards are free in most cases (or at least they are here in Canada) as long as you can prove residence, and museum and gallery annual memberships generally aren’t that expensive.

It’s like having coworking space, except you’ll often be the only one working and it’s an interesting environment. There might not be coffee immediately available, though, which is why step three is a great old stand-by.

Starbucks/Coffee Shop

Never underestimate this old time-tested web working buddy. The coffee shop will save your sanity time and time again. If you’re in a dense urban area or have access to a car, this one should be the easiest of the three steps to get a handle on. My advice is to find an independent place with low turnover, because you’ll get the familiarity benefits of an office setting without all the downside of an actual office.

All told, it looks like I might be able to shave between $300 and $400 a month off of my budget, all by accepting a move to a slightly smaller space and adding some coworking to my routine, something I’ve been hoping to do more of anyway; not a bad cost-cutting measure by any means.

Have to tried downsizing your home office to cut costs? How did it work out?

13 Comments

Eric Myers

Recently Ive had to cut the home office and just operate out of the main office to save some money. It means longer nights but its been a great way to cut costs. Ive been doing everything possible to save money recently. From the big to the small. I recently was able to cut employee and supply costs by outsourcing my phones to a telephone answering service. Things like that have been very helpful as cutting company costs.

Arunas

The article has not persuaded me. First,I dont buy the argument that one rents an extra room as a working space. An extra room is all about the quality of life not about a surface to place your laptop on. If you can work from a coffee shop table, – you surely can work from your kitchen too. Second. Where is the saving with coworking, etc. The monthly fees are said to be around USD 300 and you still talking about saving USD 300 in the end of the article?? Third, structure, discipline and a tiddy table are sufficient/needed while working from home, so working from other places is more of a social(izing thing) rather than efficiency. I ve been working from home for years and the social aspect and the ability to discipline yourself, not the space, are the most important ones

Lea

And don’t forget the new way of spending will come out of the company gross, rather than your personal net, so its an even bigger saving than it looks like.

VirtualOfficeFAQ

Great article. We are always looking to see how people structure their leap from the traditional office. Good luck and we can’t wait to see your follow-up!

rocky1138

Great article. I’ve got a two bedroom apartment for this reason as well, but find that I spend most of my time either in the cafes here in Guelph or in the living room.

I might convert my office into more of a study or living-room-ish work environment vs. office.

kim flum

in addition to what peterfox said, what is the econmic impact of travel time and mileage? if you would normally be working from home and are now commuting, this could be significant. also, not sure if i think setting up shop at the library or starbucks is all that professional.

Daniel Kaneshiro

I am launching a new site that is a marketplace of short term professional meeting spaces to save businesses money and bridge the gap between the home and traditional office. #1 recurring overhead is still recurring overhead. #2 Loses the ability to collaborate. #3 regain the quality and control of your business meetings.

Travis

Great read, I think the combination of home office and getting out sometimes is a great method. Coworking spaces work great as well, and they’re sprouting up in cities all over the country. For a huge list of coworking spaces, visit:

http://coworking.pbworks.com/

PeterFox

Any thoughts about how much those daily coffees at Starbucks might cost compared to how much you save on rent?

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